How to Calculate Quarterly Estimated Taxes
If you're self-employed, freelance, or have income without withholding (dividends, capital gains, rental income), you generally need to pay estimated taxes four times a year to avoid IRS underpayment penalties.
Who Needs to Pay
You must pay estimated taxes if you expect to owe at least $1,000 in federal tax after withholding and credits, and your withholding and credits will cover less than:
- 90% of the current year's tax, OR
- 100% of last year's tax (110% if prior-year AGI exceeded $150,000)
The Formula
Quarterly Payment = (Expected Annual Tax − Withholding − Credits) ÷ 4
Step-by-Step Example
Freelancer expects $120,000 net income, standard deduction $14,600, no other credits.
- Taxable income: $120,000 − $14,600 = $105,400
- Self-employment tax: $120,000 × 0.9235 × 0.153 = $16,963; deduct half = $8,482
- Adjusted taxable income: $105,400 − $8,482 = $96,918
- 2024 income tax on $96,918 (single filer): approx. $18,600
- Add SE tax: $18,600 + $16,963 = $35,563 total tax
- Quarterly payment: $35,563 ÷ 4 = $8,891/quarter
2024 Due Dates
| Quarter | Income Period | Due Date |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 15 |
| Q2 | Apr 1 – May 31 | June 17 |
| Q3 | Jun 1 – Aug 31 | September 16 |
| Q4 | Sep 1 – Dec 31 | January 15, 2025 |
Use our quarterly estimated tax calculator for a precise payment schedule.